DOES TREASURY UNDERSTAND THE DIFFERENCES BETWEEN CREDIT UNIONS AND BANKS – AND THE BENEFITS CREDIT UNIONS PROVIDE CONSUMERS?
Because of their cooperative structure, credit unions behave differently from stock-owned banks. This is evidenced by the fact that the credit union share insurance fund has remained very stable over the past twenty five years, while FSLIC went bankrupt at a huge cost to taxpayers, and FDIC came close to insolvency almost two decades ago. Given the distribution of assets under supervision (almost all banks), it is hard to believe that the Prudential Financial Regulator would not expect all institutions to act like for-profit banks, and design its regulations and supervision to deal with for-profit institutions. Even if virtually all credit unions were to qualify for “community status,” it is highly unlikely that credit unions would be able to remain credit unions under the supervision of an agency that expects them to act like entities they are not. This last point highlights one of the major flaws in the Treasury Department’s understanding of credit unions. What fundamentally distingu
